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South Korean stocks are on track for their biggest one-day drop in a month as investors continue to assess the geopolitical situation in the region.

Over the weekend, the Pentagon decided to deploy an aircraft carrier group to the waters near the Korean peninsula, less than a week after North Korea fired a missile into the Sea of Japan.

The Kospi was down 0.9 per cent in afternoon trade on Monday, facing its biggest one-day drop since March 3.

The Korean currency was 0.7 per cent weaker at Won1142.52 per dollar and eyeing its fifth day of declines in a row. Including today’s move, the won has fallen in nine of the past 10 sessions, and is trading at its weakest level against the greenback since mid-March.